EU countries are not 'tax havens', parliament says

Malta, the Netherlands, Luxembourg and Ireland cannot be considered as tax havens, the European Parliament agreed on Wednesday (13 December).

A Socialist group amendment listing the four EU member states specifically by name was part of 211 recommendations contained in a report by a special inquiry committee into money laundering, tax avoidance and evasion, the PANA committee.

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The proposal obtained 327 votes against, 327 in favour and 24 abstentions, which means it could not be adopted as there was no majority.

According to the text, foreign direct investment in Malta amounts to "1,474 percent of the size of its economy", while Luxembourg and the Netherlands combined have more inward investment than the US.

Even though the parliament refused to name the four countries as tax havens, "we do name the weird foreign direct investments going into these countries", which makes the adopted text "really strong" anyway, said S&D MEP Jeppe Kofod, one of the co-rapporteurs of the report.

The MEPs' vote is the last stage of 18 months' work by the special committee, that was created in the wake of Panama Papers revelations in June 2015 with the aim of eradicating the practices revealed by the leaked documents.

In Strasbourg, MEPs backed the recommendations from the PANA committee, approving them by 492 votes to 50 with 136 abstentions.

The parliament backed a common international definition of what constitutes a tax haven, an offshore financial centre, secrecy haven, non-cooperative tax jurisdiction and a high-risk country.

Among the other recommendations approved, there is also the establishment of a permanent committee of inquiry on taxation, based on the model of the US Congress.

Since a lot of follow-up work will be needed, "for the rest of the legislative period the idea is to have a special committee to keep up pressure in driving these recommendations forward", said Kofod.

EU finance commissioner Pierre Moscovici said he wished that the special committee could continue its work since it is not finished yet and "it will never be."

"[The] ability to invent new mechanisms" will always be needed, he noted.

MEPs also called for a change in the EU Council's voting on on tax policy, from the current unanimity - required by EU legislation - to a qualified majority.

This could be reached through a decision by the European Commission to make a tax reform proposal under article 116 of the EU treaty, that would lead to a co-decision between the council and the parliament - with a qualified majority in the council.

Member states "block a lot when it comes to fighting money laundering, and we have proof of that" said Kofod.

"We want to see into the secrecy culture" of member states, Kofod explained.

Prime ministers 'real enemy' of tax justice

"The real enemy of tax justice in Europe has been the prime ministers and presidents of EU governments," said Greens-EFA shadow rapporteur Molly Scott Cato, a British MEP.

Among the recommendations approved, MEPs voted also a new rules to regulate intermediaries, such as lawyers and accountants, who aid aggressive tax planning, plus incentives to refrain from engaging in tax evasion and tax avoidance.

The EU's finance commissioner Pierre Moscovici told reporters that he wants a credible EU blacklist of tax havens following the latest media tax avoidance revelations of the wealthy elite in the Paradise Papers.

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